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POCKETBOOKPATRIOTISMThe Marketing and Myths of‘Made in America’                             ENGAUGE.COM
POCKETBOOK PATRIOTISM                                      The Marketing and Myths of ‘Made in America’                   ...
99 percent foreign parts, and the Ford Mustang, an American classic, now comes off the                                    ...
loyal and more likely to skew toward domestic brands. That’s accurate in many                                       cases,...
tone, triumphalism can safely be ruled out. A low-key approach is often moreeffective. So unless your brand is the Nationa...
ABOUT THE AUTHORS                                                 David Grzelak, Executive Vice President, Consumer Cultur...
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Pocketbook patriotism 2


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Pocketbook patriotism 2

  1. 1. POCKETBOOKPATRIOTISMThe Marketing and Myths of‘Made in America’ ENGAUGE.COM
  2. 2. POCKETBOOK PATRIOTISM The Marketing and Myths of ‘Made in America’ Eminem is not your classic American pitchman. And that’s exactly why he’s the face of Chrysler’s attempt to reconnect with American consumers. Debuting with a Super Bowl spot featuring Marshall Mathers slow-rolling through the decrepit streets of Motor City, Chrysler’s gospel-themed “Imported from Detroit” campaign pushes a compelling mix of tradition, dignity and perseverance. It’s more than a pitch for a luxury car. It’s a tribute to a way of life. The appeal to American pride isn’t unique to Chrysler. The domestic car industry has been waving the flag for years. But this new campaign’s tone is pitch-perfect and the timing couldn’t be better. Recently, a number of companies have turned their American roots into a major selling point. Pushing everything from cars to clothes, these brands have converted loyal citizens into loyal customers. To emulate their success, marketers will need to assess how cultural relevance can influence opportunity size and advertising strategy. The cultural landscape has shifted. There’s a palpable fear that America’s best days are behind it and that the “American” way of life no longer exists. And yet, according to a recent Harris Interactive survey, over 60 percent of U.S. consumers say they are more likely to purchase goods marketed as “Made in America. ” The vast majority believe the best way to jumpstart the struggling economy is to buy more American goods, an assessment supported by nearly 75 percent of adults polled by BIGresearch in January 2011. It’s increasingly clear that Made in America isn’t what it used to be. Chrysler’s patriotic pitch was the brainchild of a Frenchman, CMO Olivier Francois, and an Italian-Canadian,BY DAVID GRZELAK CEO Sergio Marchionne. The automaker’s corporate parent, Fiat, is headquartered in Turin, Italy, a world away from Motown.& MYA FRAZIER Nevertheless, brands with a distinctive American character – even without a purely domestic manufacturing base – can gain an edge on competitors if they recognize and move beyond the myths surrounding “Made in America” marketing. Myth: Made in America is Moot for Global Brands For global brands with complex supply chains, some part of production will likely be overseas. That’s a reality that most consumers seem to accept. Offshoring to foreign manufacturers does not automatically disqualify companies from proclaiming their American heritage or commitment to U.S. workers. New Balance launched a new national campaign in 2009 promoting its shoe line as “Made in America. Closer inspection of the sneaker labels revealed that many were ” merely assembled in this country. In fact, only 25 percent of the company’s footwear is produced here in the U.S. While the American-made claim may seem disingenuous, the company’s five New England factories represent a commitment to the AmericanCertain product categories, such as workforce that none of its main competitors can claim, because other athletic shoe manufacturers produce zero percent of their goods domestically.hand tools and motorcycle boots,may seem more naturally appealing Two years ago, Japanese automaker Toyota was voted the Most “Americanto pocketbook patriots, but mar- Manufacturer” by in a poll based on popularity and domestic production. Theketing strategies that emphasize Toyota Camry – built in Kentucky – dethroned the Ford F-150 from the top spot on theAmerican roots have been used American-Made Index. While foreign companies have been relocating manufacturingto boost sales of everything from facilities to the U.S., American carmakers have been shifting production to Asia andkhakis to skis to cars. Mexico, making the definition of an “American car” increasingly difficult to nail down. Consider that the Korean-built Chevy Aveo, for example, is reportedly made with POCKETBOOK PATRIOTISM | 2
  3. 3. 99 percent foreign parts, and the Ford Mustang, an American classic, now comes off the assembly line with 40 percent foreign parts. For a product to be called “Made in U.S.A. it must be “all or virtually all” made in the ” United States, according to FTC guidelines. Yet heritage brands that no longer have a purely domestic manufacturing base can still derive value from their American roots, even if they’re not formally labeled “Made in U.S.A. ” Woolrich, maker of classic outdoor clothes that your great-grandfather – or Ernest Hemingway – might have worn while hunting stags or splitting logs, has experienced a resurgence in recent years. Its classic buffalo-checked coat is the cornerstone of a full line of apparel that has been embraced as an antidote to metrosexual Italian chic and cheap Asian knockoffs. The company operates a wool mill in Woolrich, Penn., where it was founded in 1830 and still maintains its headquarters, yet the clothes are actually assembled in Europe. Despite the lack of local production, the Woolrich brand has maintained its reputation as a high-quality U.S.A. original because their clothes look American. Still, many consumers who actively seek to buy American believe they are supporting U.S. workers like themselves. It’s a decision based on practical patriotism with a personal appeal, not blind support of corporate brands or abstract ideals. “If it’s made in America and you buy in America, there’s a job in America. And I’m creating jobs, said Scott W. Anderson, describing the rebirth of the Anderson-Little ” clothing line that his grandfather founded during the Great Depression, and which recently relaunched from a factory in Florida. In an interview with Adweek, Anderson said: “Eighty-five percent of the time, made in America is the determining factor in the sale. ” At the Red Wing Shoe factory in Minnesota, which has been using local labor to handcraft boots for over 100 years, global marketing manager Jenny Tauer agreed that consumers “want to be proud of keeping people employed. Red Wing work-wear ” products are made in the U.S.A., a distinction that created a reported uptick in sales and brand visibility during the downturn. The success of companies touting “Made in America” credentials is atypical in theFTC guidelines apply to what apparel business, which has been defined by European styles and Asian production forcan be marketed, whether the better part of two decades. In 1980, 70 percent of clothes sold in the U.S. were madeimplicitly or explicitly, as “Made in here; that figure had slipped below 50 percent by 1995. Today, it’s below 10 percent, according to Women’s Wear Daily.U.S.A. There are also alternative ”certifications that acknowledge the Common sense suggests that patriotism levels rise when a nation faces a commoncomplex realities of globalization, threat, such as the recent economic downturn, and decline again as the threat recedes.including My America Jobs, This isn’t actually true. The proportion of people saying they are very patriotic has variedwhich ranks brands from one to by just four or five percentage points over the last two decades, according to Pewfive stars, based on their relative Research and Gallup. The percentage of people who say they are extremely patriotic,amount of domestic manufacturing however, increased to 32 percent of the total population in 2010, which is one-thirdand assembly. more than 2002 (24%) and two-thirds more than 1999 (19%), according to Gallup/USA Today polls. Brands that are facing strong foreign competition should consider how this peak of patriotism impacts their positioning. There are nearly 20,000 active U.S. trademarks that incorporate “America” in their name, according to the U.S. Patent and Trademark Office, but only a handful of brands have the cultural cachet – and workforce credentials – to live up to the name. Myth: The Youth of America Just Don’t Care It’s a common misconception that the youth of this country do not care about where their products are made. Marketing analysts will tell you that older buyers are more POCKETBOOK PATRIOTISM | 3
  4. 4. loyal and more likely to skew toward domestic brands. That’s accurate in many cases, but it is not an inviolate rule. Far from it, in fact. Opinion polls are partly to blame for this mistaken impression. In a Harris Interactive survey, fully three-quarters of adults aged 55 and over said that they would be more likely to purchase goods marketed as “Made in America. That ” figure fell to 44 percent among U.S. consumers aged 18-34. It’s also noteworthy that consumers over the age of 65 are nearly twice as likely to be extremely patriotic (40%) than consumers aged 18 to 29 (22%), according to Gallup/USA Today surveys. Among these self-identified super-patriots, there are far more men (37%) than women (28%). Consumers in the Midwest also tend to be more sympathetic to domestic brands than shoppers in California and the Northeast. Based on this data, male Midwestern septuagenarians would seem most likely to prioritize and patronize American brands over foreign competition. If that’s the case, why did Chrysler choose a controversial 38-year-old hip-hop star as its new front man? Classic American heritage brands like Pabst Blue Ribbon, Zippo lighters and Red Wing Shoes have surged to popularity by engaging and motivating younger demographic groups. In this context, the choice of Eminem makes sense. Because even behind the leather-wrapped wheel of a luxury vehicle like the Chrysler 200, Eminem is clearly not a pitchman for the senior set. Opinion polls often fail to predict actual buying behavior, and on issues of patriotism, they may be missing the mark of what America really means to Millennial and Generation X consumers. Young working-class men, in particular, face severe unemployment and dwindling prospects for well-paying jobs. Among young males aged 16-24 who are looking for work, the unemployment level peaked at around 20 percent last year. The domestic manufacturing base has already been dismantled and is not likely to return. Patriotism, in this context, represents a connection to an American way of life – and buying into the familiar heritage of strong American brands may offset the fear among some consumers that the country’s best days are behind it. Brands ranging from muscle cars, such as the Charger and the Mustang, to popular media programs, like Dirty Jobs and American Chopper, tap into the powerful ideals of America. In the current economy, price will often trump the patriotism card for the majority of young consumers. However, even in this environment, brands that build an emotional connection with consumers may outmaneuver those that compete on price alone. The cultural relevance of the brand can actually outweigh (or at least compete with) traditional differentiators like cost and performance. Brands can elevate their message above the commoditized conversation about product attributes into a more meaningful connection.Country-of-origin effect and “People are starved for things that are true to what they are, said Bill Thomas, ”consumer ethnocentrism have founder and CEO of Bills Khakis, who told Women’s Wear Daily that the “Made inbeen examined in over 1,000 America” label has served his brand well lately. “There’s more relevance for these products now. ”research studies, beginning withthe seminal “Elasticity of ProductBias” by Robert Schooler andAlbert Widlt in 1968. Yet there Myth: Patriotic Pitches Require Flags and Fireworks Eminem may be the most-liked person on Facebook, but he also has a reputation ashas been criticism that Ivory a scrappy workaholic from a hardscrabble hood. He’s not Steve McQueen. He’s notTower research increasingly lacks James Dean. But like those past icons of American cool, he exudes confidence andrelevance to business practitioners. charisma without looking like he’s trying too hard. He’s a guy who tells it like it is.Likewise, industry opinion polls onpatriotism and product preference These days, one-third of Americans define “luxury” as being able to pay theoften fail to predict actual buying bills on time, and three-quarters are now living a simpler life as a result of theactivity. recession, according to a survey last year from BIGresearch. In terms of advertising POCKETBOOK PATRIOTISM | 4
  5. 5. tone, triumphalism can safely be ruled out. A low-key approach is often moreeffective. So unless your brand is the National Football League, skip the cheerleaders,flags or fireworks.Pabst Blue Ribbon is a useful case study in how subtle marketing can build all-American brand equity. During the depths of the recession in 2009, annual salesof PBR jumped 25 percent, even though PBR prices were higher than other sub-premium beers like Miller High Life, which had dramatically outspent PBR in terms ofmeasured media.Pabst Brewing Co. studied how it was being consumed and perceived in themarketplace. The brand had an anti-establishment edge and appealed to a retrocrowd of nonconformists, according to one major market wholesaler consultedby Advertising Age. PBR expanded that niche fandom among urban hipsters intomainstream success as recessionary drinkers looking to trade down opted for thebeer with the most cultural cachet.Clint Eastwood, playing a cranky old ass-kicker in Gran Torino, appears in severalscenes holding an open red, white and blue can of PBR. It was a well-conceivedplacement that bridges the traditionalist, patriotic PBR customer base and the newgeneration of loyalists. The brand has managed to hold onto both demographics,partly because these guys don’t drink at the same bars, but also by eschewing massmedia marketing. The beer voted “America’s Best” at the Chicago World’s Fair in 1893has recaptured its status as a true standout.Digital, social and events marketing can be highly effective for promoting an all-American image that doesn’t pander to patriots. These channels are also useful foractivating existing enthusiasts and leveraging their energy to generate mainstreamawareness. Red Wing boots, for example, are popular with professional truckers,hence the company’s sponsorship of the National Truck Driving Championships. Butthe footwear is also a favorite of well-heeled, male hipsters who dig the trucker vibeand old-school machismo. For them, Red Wing Shoes created a website featuringsepia-toned photos of work boots and the factory alongside a timeline that stressesthe brand’s connection to the heartland since 1905. Red Wing Shoes also produceda series of videos (viewable on YouTube) showcasing their down-to-earth employeesin their Midwestern plant, including an interview with a cobbler that has been viewedover 50,000 times in its first two weeks online.There’s a big shift we’re starting to already see, Rob Kozinets, an anthropologist ”and professor of marketing at York University’s Schulich School of Business, toldAdvertising Age. “People are becoming more concerned about production, not justconsumption. It’s interesting to see it showing up in advertising.”The Takeaway• “Made in America” isn’t moot for global brands. Major brands with complex supply chains may not meet the formal standards for “Made in U.S.A. marketing, ” but buying American isn’t just about labels, it’s about cultural brand relevance that motivates and affirms consumers.• The youth of America do respond to patriotic appeals. While older residents of the Midwest and High Plains tend to profess the highest levels of patriotism and related purchase intent, a number of brands – from Pabst Blue Ribbon to Red Wing Shoes – have built their reputations as purveyors of classic American cool by also appealing to younger urban hipsters.• Forget the flags and fireworks. A low-key approach is better suited to the post- recession dynamic and will be more credible in establishing bona fides. Digital, social and events marketing can be highly effective in this regard. POCKETBOOK PATRIOTISM | 5
  6. 6. ABOUT THE AUTHORS David Grzelak, Executive Vice President, Consumer Culture David runs the Columbus Project, an Engauge ethnographic research initiative that has been tracking media consumption and purchase habits in the homes of 100 families in the American heartland since 2007 As a cultural anthropologist and researcher, . he has dedicated his career to combining cultural and theoretical thinking with sound marketing strategies in order to influence consumer behavior in the marketplace. It’s his goal to truly understand consumer beliefs; that’s why he spends his time visiting consumers in their natural habitat, where opinions are formed and decisions are made. He then uses this firsthand knowledge to guide strategic thinking for clients and brands. His brand experience includes Nationwide Insurance, Huntington National Bank, ZonePerfect, Kraft Foods, and American Electric Power. Mya Frazier, Director of Trends and Insights Prior to joining Engauge, Mya spent more than a decade as a business journalist, including stints as a staff writer at Advertising Age and The Cleveland Plain Dealer. Her writings on business and culture have also appeared in The Economist, The New York Times, Sky Delta and American Demographics. She currently writes a blog for and PBS, chronicling the impact of digital, mobile and social marketing trends on content, culture and commerce. Follow her @myafrazier. ABOUT ENGAUGE One of the nation’s largest independent agencies, Engauge leverages creativity and technology to connect brands and people. The agency’s client roster includes Nationwide Insurance, Perkins Restaurant & Bakery, Ainsworth Pet Nutrition, Coca- Cola, Best Buy For Business, Chick-fil-A, Brown-Forman, Food Lion, The State of Georgia, Donatos, NGK Spark Plugs and more. Engauge, which has offices in Atlanta, Austin, Columbus, Orlando and Pittsburgh, is a portfolio company of Halyard Capital.FOR NEW BUSINESS INQUIRIES:Greg DavisExecutive Vice President,Business Developmentemail: gdavis@engauge.commobile: 914.645.4381 Image Credits: p1: Nesster, p2: Jason Kuffer, p4: Stewart Butterfield, p5: Quinn Dombrowski, POCKETBOOK PATRIOTISM | 6